Shares in Air France KLM SA (EPA:AIRF) slipped in midday European trading on Friday, after the carrier reported a larger-than-anticipated first-quarter loss despite strong summer bookings.

In the three months ended on March 31, the airline reported an operating loss of €306 million. It marked a decline of 13% compared to the result in the corresponding timeframe last year, and was bigger than Bloomberg consensus estimates for a loss of €274.7M.

Revenue jumped by 42.4% to €6.33 billion, while adjusted operating free cash flow improved by more than twelve-fold to €683M. Group chief executive Benjamin Smith said these returns were thanks to “very encouraging” ticket sales for the key summer period, as customers showed signs that they were shrugging off concerns over a recent increase in living costs to spend on travel.

“This is paving the way for a busy holiday season across our global network,” Smith added.

However, inflationary pressures first sparked by the outbreak of the war in Ukraine last year continued to weigh on the company’s performance. The trend has led to higher staff and handling costs, as well as an uptick in general expenses, Air France-KLM flagged.

Meanwhile, it narrowed its capacity outlook for the 2023 financial year to around 95%, down from its prior estimate of between 95% to 100%. Analysts at Morgan Stanley also noted that Air France-KLM did not provide “explicit” guidance for core earnings going forward.